Understanding your risk tolerance is one of the keys to successful investing. The relationship between risk and reward was clearly on display in 2018. Equity investors were taken on a wild ride that was punctuated by a closing week that saw 1,000 point shifts in a single day. Times like these illustrate the reality of investor sentiment and the fear of missing out (FOMO). What may have started as end-of-the-year rebalancing and profit taking cascaded into a rout for some equities to close out the year.
The volatility that returned to the market last year also illustrates the fact that there is no such thing as a risk-free market. At the end of 2018, there were fears of interest rate hikes and rising inflation. The market was continuing to divine the tea leaves regarding the United States’ ongoing trade dispute with China.
Today, we’re seeing that inflation is still being held at bay, the Fed has done their part to quiet fears of impending interest rate hikes, and the U.S. and China continue to talk – which doesn’t mean a deal will happen, or even that one is close – but it beats the alternative. However, the market now faces new threats from political unrest in the Middle East that is adding momentum to higher seasonal oil prices. Internationally, there is still unrest over Brexit.
As the market gets ready to take a peek at 2019's first-quarter earnings report, it's a good time to remind investors that there are some risks that are well worth taking. In this report, we'll take a look at seven stocks that are considered "high risk" either because of the sector they're in or because of other factors. However, we'll also point out how each of them offers the potential for a big reward.
Click the "Continue to Slide #1" button to view the first company.
